by Calculated Risk on 9/03/2008 09:01:00 AM

From the WaPo: BB& T Deal Eases Comstock's Debt (hat tip Don)

Comstock Homebuilding of Reston said yesterday it has reached a deal with lender BB&T to wipe $32.7 million worth of troubled development loans from its books as it struggles to rebound in an ailing housing market.

Under the deal, BB&T foreclosed on four of Comstock's properties in the Atlanta area yesterday. Two properties in Northern Virginia -- a condominium project in Manassas and a single-family home project in western Loudoun County -- are scheduled to go into foreclosure by Sept. 30, according to Comstock.

Delinquency rates are rising quickly on C&D (construction and development) loans, and many mid-size institutions (assets in the $1 billion to $10 billion range) have excessively high concentration of C&D loans. This is a serious problem and these C&D loan defaults will probably lead to many of the bank failures of the next couple of years.

BB&T will probably have significant losses on these loans as they try to dispose of these properties. I'll post some FDIC graphs on this issue later today.